Jervis sells $75,000 of its accounts receivable to Northern Bank in order to obtain necessary cash. Northern Bank charges a 5% f
actoring fee. What entry should Jervis make to record the transaction?
1 answer:
Answer:
Debit cash by $71,250, factoring expense by $3,750 and credit account receivable by $75,000.
Explanation:
Step 1 of 2
Calculate the amount of factoring fee.
Factoring fee = 5% ×Account Receivable
=5%×$75,000
=$3,750
Step 2 of 2. Journey record. Image attached.
Debit cash by $71,250, factoring expense by $3,750 and credit account receivable by $75,000.
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Answer:
Market Share price $ 31,12
Explanation:
The price of the stock will be the same as the present value of their dividends:
Year Dividend Presnet Value
First year $1,00 $ 0,8621
Second $2,00 $ 1,7241
Third $3,00 $ 2,5862
Total Value $ 5,1724
Now, we solve for the horizon value
3 x (1.08) / (0.16 - 0.08) = 40,50
And, as this is three year ahead we also discounted like the other dividends:
Maturity 40,50
time 3,00
rate 0,16
PV 25,95
And last, we add up the horizon with the other dividends:
5.17 + 25,95 = 31,12